2019 Limits for Retirement Plans

The Internal Revenue Service recently released some of its annual cost-of-living adjustments that will affect the 2019 tax year, such as contribution limits to qualified retirement plans.  The following are some of the important changes to keep in mind.

401(k) contributions:  Elective deferrals for 401(k) participants will be $19,000, increased from $18,500. The same limit also applies to defined contribution plans such as 403(b)s, most 457 plans and the federal Thrift Savings Plan.

IRA contributions:  The limit on annual contributions to an IRA is increased to $6,000 for 2019 from $5,500. And the additional catch up contribution limit for participants age 50 and older remains at $1,000, for a total of $7,000.

Roth IRA income limits:  The IRS increased income limits on who can contribute to a Roth IRA.  The income phase-out range for single filers is modified adjusted gross income between $122,000 and $137,000 in 2019. (That’s up from $120,000 to $135,000 in 2018.) Married couples filing jointly have a phase-out range with MAGI between $193,000 and $203,000, an increase of $4,000 on either end.

Within a phase-out range, contributions are limited, eventually reaching zero.

Traditional IRA deductions:  The income limit for deducting contributions to traditional IRAs will increase in 2019. Single taxpayers covered by a workplace retirement plan have a phase-out range between $64,000 and $74,000, up from $63,000 to $73,000.

The phase-out for married couples filing jointly will be $103,000 to $123,000, if the spouse making the contribution is covered by a workplace plan. That’s an increase from between $101,000 and $121,000.

Defined benefit plan:  The limit on the annual benefit received under a traditional pension plan will increase to $280,000, from $275,000.

Simple plans:  The contribution limits regarding SIMPLE retirement accounts increased to $13,000 from $12,500.

For more information, please contact us.

Author: Paul McIntyre

Chief Compliance Officer

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